 "Brotin Banerjee, Tata Housing")
With projects ranging from affordable to premium, Tata Housing expects to be among the top three real estate players in the next five years. In an interview with Mansi Taneja, Tata Housing MD and CEO Brotin Banerjee talks about the company and the sector. Edited excerpts:
Tata Housing is present in affordable segment in a significant way. Is the company planning to launch such projects in markets outside India? And what kind of investment has been earmarked for overseas expansion?
We are working with few South East Asian governments to offer affordable housing in their countries. But currently, everything is in a planning or due diligence stage and hence we would be able to comment on this at a later stage.
The company recently forayed into senior living space through Riva in Bengaluru. How big would this segment be for the company over the next few years?
We are the first corporates to enter the senior living segment. This decision was taken after two years of research to understand the day-to-day issues faced by senior citizens like growing sense of insecurity, craving for companionship, increasing physical disability and need for quality healthcare.
The segment has tremendous potential and makes for a viable investment from consumers and developers alike.
What will be the total investment in Riva projects and what other cities are next on the radar?
Currently we have made an investment of around Rs 70 crore. We aim to make Riva Residences a pan India brand and are looking to expand in markets including Mumbai, Ahmedabad, NCR and Chennai.
What is the current project portfolio across segments -- affordable, luxury? And what is the future plan in terms of cities/states you want to enter?
Both companies -- Tata Housing and its subsidiary Smart Value Homes Limited (SVHL)-- will continue to expand their portfolios. In 2013-2014, we will be launching around 15-20 million square feet of projects and will continue to expand its presence across the 10 metros and emerging cities. Besides, launches across consumer segments in Maharashtra, National Capital Region, Bhubaneswar, Himachal Pradesh, Bangalore and Kolkata will be done.
Five years down the line, where do you see Tata Housing?
Tata Housing has aggressive growth plans. In the premium and luxury segment, we aspire to be India’ most preferred brand and in the value & affordable segment we aspire to be India’s largest home provider. As a company on the whole, we see Tata Housing as one amongst the top three players in the Indian realty space.
Will the company focus more on luxury because of high margins or it would be both luxury and affordable in equal proportion?
We will continue to focus across all consumer segments and expect all consumer segments to grow at a healthy pace. However, we believe that affordable and low-housing segment is likely to see the highest growth but other segments will also grow as people aspire for better homes, better quality of life and hence invest more in buying their homes.
The demand for luxury homes is coming from cities such as Bangalore, Delhi, Chennai, Kolkata, Mumbai and others. Moreover, there is an increasing demand from emergent and tier II and tier III cities and developers are introducing luxury and high end projects in the these cities as well.
Do you see prices in real estate stabilizing over the years or would it continue to move up?
Price movements in the real estate market depend on the result of demand and supply. We expect the prices to stabilize and don’t see any significant appreciation anytime soon.
With the Indian economy getting back on track, real estate sector is expected to stabilize in the next two to three quarters. We would anticipate this sector to grow, albeit at a slightly lower pace, as the demand for housing still appears to exceed supply, and the weakening rupee makes India an attractive real estate investment destination for non-resident Indians. As per the recent industry reports, the sector is expected to grow at the rate of 30% over the next decade.
India is an attractive investment destination for international MNCs and investors who are seeing a lot of potential in this country. FDI in multi brand retail will also give a push to the growth in the real estate sector.
